Commissary fruit, vegetable prices may soar in some Pacific stores

Mar. 11, 2014 - 06:00AM
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A produce display is seen at the Fort Bragg North Commissary in N.C. Commissary officials are floating a proposal that could cause the cost of fresh fruits and vegetables to skyrocket in stores in Guam, Japan and South Korea. (Defense Commissary Agency)

Commissary officials are floating a proposal that could cause the cost of fresh fruits and vegetables to skyrocket in stores in Guam, Japan and South Korea.

The Defense Commissary Agency’s request for proposals to the produce industry has caught the attention of Rep. Joe Wilson, R-S.C., chairman of the House Armed Services Committee’s military personnel panel, who has fired off a letter to Joseph Jeu, DeCA director, asking him to delay the pending RFP and re-evaluate the available market research data.

“Because of my concern for the well-being of our troops, I am troubled by a proposed change to the way produce is to be procured for commissaries in the U.S. Pacific Command,” Wilson said, adding that he was “distressed” by the situation.

At issue is an apparent attempt by DeCA to stop paying costs for shipping U.S.-grownproduce to the Pacific region — although the law requires that — in favor of procuring local produce that may be of lesser quality and would likely be much more expensive for consumers.

Wilson noted that the Asia/Pacific region was delayed from participating in DeCA’s Fresh Fruits and Vegetables program because of the quality and quantity of local produce in some parts of the region.

A spokeswoman for Wilson said the congressman has not received a response from DeCA or defense officials.

In response to inquiries from Military Times about what prompted the RFP, spokesman Gary Frankovich said the proposed changes would follow the same processes used for stores in the U.S., to include Alaska, Hawaii and Puerto Rico, as well as for stores in Europe since 2008.

“The quality standards have not been lessened for the current solicitation for the Pacific theater,” Frankovich said.

Wilson expressed concern about the cost of local fresh fruits and vegetables in Guam, Japan and South Korea, and whether DeCA could continue to provide significant savings on those goods.

As an example, he said a pound of carrots in a commissary costs 75 cents, compared to $2.27 in northern Japan. “I would be surprised if a vendor was able to make up those savings and pass them on to our service members and their families,” Wilson wrote.

Currently, the cost of shipping produce overseas from the U.S. is paid for using appropriated funds — taxpayer dollars — in order to provide quality and prices that are comparable to U.S. commissaries.

Wilson noted that Defense Secretary Chuck Hagel has stated that overseas commissaries and those in remote locations will continue to receive direct subsidies under a proposal to slash DeCA’s annual budget by two-thirds over the next three years.

“These ‘subsidies’ are a direct appropriation by the Congress to ensure our overseas troops, their families, and retirees have access to safe, high quality and familiar food at prices comparable to those in the United States,” Wilson wrote. “Congress feels so strongly about this responsibility that the requirement is codified in law.”

DeCA’s initial request for proposals asked contractors to guarantee that their prices would allow customers to save at least 25 percent compared to prices in comparable private-sector retail stores in local communities within the host country. DeCA has since reduced that to a guarantee of 15 percent savings over local prices.

The cost of produce in some of those Pacific locations tends to be much higher to begin with than in the U.S.

One source familiar with the process said the move would double the cost of produce for commissary customers while reducing selection on the shelves.

Efforts to provide fresh fruit and produce locally in Europe have been easier, the source said, because of greater availability of fresh fruit and produce, high government standards and lower transportation costs because much of the movement is across large land masses.

DeCA already buys about 25 percent of commissary produce locally in the Asia/Pacific region, according to the source, who spoke on condition of anonymity.

Under the request for proposals, if the required produce is not available locally and must be purchased in the U.S, the contractor would have to pay the transportation costs to ship it overseas.

Franovich said there is no requirement that the contractor provide products from any specified locations, local or otherwise. “That will be up to the contractor to decide the best source,” he said.

One former defense official said the initiative is “a pure cost reduction effort on DeCA’s part.”

“If they don’t have it locally, the contractor will have to ship it in, and the patron will have to pay,” the official said. “Whether they procure it locally or ship it in, the patron will have to pay more. We should be providing better for our military families.”

Wilson noted that Congress required the Military Compensation and Retirement Modernization Commission to review the full range of benefits for those in the military community.

“Dramatic changes to these benefits — like those proposed in the DeCA RFP — should be the focus of intensive stakeholder discussion and careful consideration by the President and Congress as part of the compact that our nation has made with those who serve, those who have served, and their families,” Wilson wrote.